In a widely applauded move,
UnitedHealth Group, the nation’s second-largest health insurance company,
has announced plans to allow physicians the final say on what treatment
is medically necessary for their patients. Physicians will still be subject
to "economic credentialing," meaning they will be monitored and may be
sanctioned if they approve too much care (or inappropriate care) too frequently.
Such physicians could be dropped from UnitedHealth’s network of physicians.
Nonetheless, the move by UnitedHealth is a striking one, challenging a
fundamental tenet of managed care, i.e., that prospective utilization review
of proposed treatment decisions is necessary to control the costs of health
care.

News articles have focused
only on the new approach granting physicians more control of what constitutes
medically necessary treatment. However, the change in policy is only part
of a new initiative UnitedHealth calls "Care Coordination," a program that
focuses on improving individual’s health through education, accelerated
access to care, coordination of fragmented services and outcome measurement,
together with increased monitoring of members who have chronic and complicated
medical conditions. UnitedHealth says seven "core" clinical activities
are utilized, including Health Education, Admission Counseling, Inpatient
Care Advocacy, Readmission Prevention, Disease Management, Complex Illness
Support, and Pharmacy Management. See http://www.uhc.com/press/991109ccoord.html.

Advocates of managed care
reform and physicians have formed loose coalitions in recent years to promote
the idea that physicians--not "utilization reviewers"--should make treatment
decisions. However, others have argued that utilization review is required
to keep costs, or inappropriate care, in check. As is often the case in
health policy, little hard data exists to support either side in this debate.
Before implementing its change of policy, UnitedHealth pilot tested its
new policy in Tennessee earlier this year before beginning national implementation.
Ironically, the change in policy was not made to appease critics of managed
care, but rather for sound business reasons. The company found that it
was spending $100 million annually to review procedures and was approving
99% of requests for coverage. By changing its policy, UnitedHealth will
be able to cut its medical monitoring staff by 20% nationally.

The company should enjoy
additional tangible and intangible benefits. It has already enjoyed substantial
public relations benefits, including compliments from President Clinton.
Also, the company will not have to endure the costs associated with external
review in states such as Texas that allow patients to appeal denial of
care decisions. The company should also save legal expenses. For example,
Humana, another managed care organization (MCO), was recently sued for
allegedly failing to disclose conditions of its coverage and for paying
staff to deny coverage.

The voluntary move by one
MCO should not derail efforts in Congress to enact a patients’ bill of
rights, nor should it signal that managed care companies have given up
efforts at cost containment. Rather, it should challenge managed care companies
to reconsider other criticized practices of managed care.